Four years later, Subchapter M remains just a proposal

Oct 2, 201501:54 PM

by David A. Tyler

Brian Gauvin

A line-haul towboat pushes a load of coal on the Mississippi River near Baton Rouge, La.

Mired in an endgame that has taken much longer than anyone thought at the time, a U.S. regulatory regime for inspection of towing vessels is entering its fifth year of discussions since the proposed rule was first published.

The rule, Subchapter M to 46 CFR, was released in August 2011 and has been commented on, reviewed and debated. Release dates have come and gone and yet the final rule remains unpublished.

The drawn-out process and the uncertainty of when the final rule will be released have made it hard for operators to plan. There has been disagreement over the two proposed options for compliance: an annual Coast Guard inspection, or a Towing Safety Management System (TSMS) in which third-party organizations conduct audits and surveys, certified by the Coast Guard.

When Subchapter M is published, it will be a final rule, according to Lt. Cmdr. William A. Nabach, project manager at the Coast Guard Office of Design and Engineering Standards.

After several years of planning, meetings with industry and a voluntary towing inspection program to prepare the industry for the regulations, the Notice of Proposed Rulemaking (NPRM) was issued Aug. 11, 2011. The Coast Guard held public meetings across the country, and comments on the NPRM were due Dec. 9, 2011.

Within the past year, industry publications speculated that the rule would come out in August. However, the latest official word is that publication of the final rule is set for February 2016, according to a posting on the website of the federal Office of Information and Regulatory Affairs, which is part of the Office of Management and Budget.

Controversy over issues of minimum manning complicated the rulemaking process. The development of minimum manning standards for Subchapter M coincided with the Coast Guard’s revision of manning standards in the Marine Safety Manual. Reconciling these regulatory procedures took nine months, with the Coast Guard’s Towing Safety Advisory Committee approving Subchapter M manning recommendations for domestic voyages in 2013.

The bulk of the time in the rulemaking process was the Coast Guard’s analysis of comments on the NPRM. The Coast Guard received about 300 submissions containing 3,000 comments.

“We spent the last two years going over all those public comments that we received on the docket,” Nabach said in July. Some of those comments resulted in changes to the draft, but they all had to be considered as the Coast Guard developed the final rule. “We have to show how we handled every public comment we received,” he said.

Nabach said he could not comment on any changes. “I fully understand that people want to get started, and we think we know what it will finally look like, but somebody else has to take a look at it,” he said. “I don’t want to send anybody down the wrong path.”

One recent development is that the Coast Guard has said that the Responsible Carrier Program (RCP) developed by the American Waterways Operators (AWO) is close to becoming an approved TSMS. The Coast Guard compared the RCP to Subchapter M provisions.

“Based on this review, we conclude that the RCP is substantially equivalent to the ISM Code and that the revised external audit frequency comports with the requirements proposed in the Subchapter M NPRM,” wrote Capt. K.P. McAvoy, chief of the Coast Guard’s Office of Commercial Vessel Compliance, in a June 1 letter to Jennifer A. Carpenter, AWO’s executive vice president.

The RCP is a voluntary safety management system available to AWO members that establishes industry operating principles, practices and standards.

Subchapter M was sent to the Department of Homeland Security in April of this year for review, according to Carpenter. After Homeland Security, the Office of Management and Budget has 90 days to process the rule.

The lengthy process has a personal meaning for Carpenter. A group of AWO leaders talked to the Coast Guard commandant about towing vessel inspection in December 2003, the week her son was born. “We are still waiting for the rule and my son is 5 feet tall and starting the sixth grade,” she said. It was the Coast Guard and Maritime Transportation Act of 2004 that mandated the regulation of towing vessels.

After numerous delays in publishing the final rule, the industry has Subchapter M fatigue, according to Kevin P. Gilheany, owner of Maritime Compliance International. “I think it has negatively impacted the industry because people have just given up even listening,” he said.

The delays have made it difficult for companies to plan for the proposed regulations. “It’s probably more of frustration, that they have this looming unknown that continues to be unknown for several years,” said William Mahoney, managing director of Safety Management Systems of Portland, Maine.

A tow moves through Pickwick Lock on the Tennessee River system. The Subchapter M rule, which has been under review for four years, will provide for the nation’s first framework for towing vessel inspections by the U.S. Coast Guard.

Courtesy U.S. Army Corps of Engineers

Operators are impacted in many ways, particularly when it comes to newbuilds, said Michael Serafin Jr., managing director of Baker, Lyman & Co., a Metairie, La.-based provider of maritime safety materials.

“If people are doing new construction, there’s no picked standard yet,” he said. “Do you build the way you normally build and hope they let you go?” But if you add specifications that are part of the proposed rule, and they are not in the final rule, then “you’ve spent money on something nobody needs to have,” Serafin said.

Interestingly, Serafin has had recent inquiries from clients about getting ready for Subchapter M. “In the last month or two, we’ve had an uptick in people who are seeking advice,” he said. The last time some of these clients spoke to him about the new rule was three years ago.

In addition to controversy over new equipment and physical requirements prescribed by the rule, a major debate has been whether the final rule should allow operators to undergo an annual Coast Guard inspection to comply with the rule, or to require all operators to submit a Towing Safety Management System.

The safety management system is a written plan that would include all policies and procedures ensuring compliance with Subchapter M, according to the proposed rule. Third-party companies would review and approve the TSMS and conduct external audits of a TSMS to make sure it is working as intended. They would provide independent technical expertise to examine the vessel, its systems and equipment. The Coast Guard would review and approve these third-party companies.

The AWO has advocated for the safety management plan as the method for Subchapter M compliance.

“We would really like to see all companies subject to a safety management system,” said Carpenter. “The evidence is clear. Safety management systems work — they are uniquely capable of addressing the most significant causes of accidents in the industry. We think everybody should have them.”

When asked if a TSMS would be more difficult for smaller operators, Carpenter disagreed. “AWO has one- and two-boat operators that have a safety management system and that works for them,” she said. “It is scaled to these operations.”

Capt. Richard Jaques, head of port operations for the Cross State Towing Company Inc. of Jacksonville, Fla., said that the inspection option is the most cost-effective for small companies. “I would rather have the Coast Guard come just like they do here for our barge inspections,” he said. “I think the Coast Guard is honest and fair.”

Cross State Towing has eight towing vessels and 14 barges. Jaques said his company took part in the Coast Guard’s voluntary examination program. Started in 2009, the towing-vessel bridging program was created to help operators adjust to becoming an inspected industry.

With the establishment of the TSMS, towing vessels and large vessels on international voyages will be the only domestic ships that are required to have a safety management system, said Maritime Compliance International’s Gilheany, who finds that odd.

Carpenter said this is good for the industry. “I would characterize it not so much as an exception but as an evolution and improvement,” she said. “The fact that it was not previously required is really reflective that we are doing this now, and not 15 or 20 or 40 years ago. We are doing this now — in the intervening period we have learned that a safety management system is effective in addressing the primary causes of towing accidents.”

Gilheany said that since the TSMS will involve a third-party surveyor and a separate company as an auditor it will be difficult to get consistent results.

“Anybody who does an actual audit and tries to find objective evidence through interviews (about the safety management system) is going to find that every size company will have a problem proving that the captains are operating the vessels in accordance with written policies and procedures,” Gilheany said.

“I think the Coast Guard inspection is easier, as long as you have the money to invest in upgrading your boats to meet the requirements,” he said.

Other operators disagree. “Quite frankly, meeting the requirements as they were written in the NPRM would be onerous if a company did not have a management system in place to begin with,” said Angie Fey, vice president of quality assurance and corporate compliance for Blessey Marine Services Inc. of Harahan, La. Blessey owns 82 towing vessels and 170 barges.

Blessey will not hire an outside consultant to help comply with Subchapter M. It is part of the AWO’s Responsible Carrier Program and the Oil Companies International Marine Forum’s Tanker Management Self Assessment program.

“Over the past year, we have grown our organization, not only to meet the growth in our equipment, but also to identify potential gaps and add people where needed as we anticipate Subchapter M,” said Fey.

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